January 2017 Mortgage Market Share Report

2016 Year End Report Highlights

The Monroe County purchase market continued its post-recession improvement in 2016 showing a year over year gain of 13.5%. (deeds on page 13) Transactions reflecting both owner occupied and non-owner occupied sales also reached post-recession highs. (pages 15 and 17) I?m confident that we?re now experiencing a normal market.

In the years immediately following the great recession, the market was suppressed by high unemployment and restrictive lending practices. Federal home buyer tax credits helped some, but the market remained quite weak. Now that we appear back to normal, a reasonable question is just how much pent up demand is there, and what effect that will have on our local market?

The graph on page 19 is my attempt to answer the first part of that question. First, I?m assuming that 2600 transactions is a normal market. Unemployment is not a concern and interest rates are low. That motivates buyers. Ten to twelve years ago, due to the sub-prime phenomenon and strong homebuilding, there were over 3100 transactions a year. The red parts of the bars represent the actual number of deeds recorded for each year. The green parts of the bars are the number of transactions that did not happen.

If you agree that 2600 is a good number without the sub-prime juice, you?ll see that for eight years in a row, the market fell short. So the total of all the green bars represents pent up demand. If you add those numbers to the number in a normal market, you?ll see evidence as to why there are so many more buyers than sellers right now. As a result, even with higher interest rates, the 2017 market will remain strong. On page 20, you?ll see the decline in single family building permits ? which also contributes to a buyer?s perceived shortage of homes for sale.

The admittedly unscientific chart on page 23 shows a correlation that I?ve nevertheless always believed. Namely, gas prices affect people?s confidence. And confident people buy homes

December was a terrific month for our team. We helped 465 people buy, sell or refinance their property. We delivered seller side closing statements 2 or more days prior to closing in 92.9% of our transactions. And we averaged a commitment delivery time of 4.0 days.

~ John Bethell